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entitled 'Defense Logistics: Navy Needs to Develop and Implement a Plan
to Ensure that Voyage Repairs Are Available to Ships Operating near
Guam when Needed' which was released on May 13, 2008.
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Report to the Committee on Armed Services, House of Representatives:
United States Government Accountability Office:
GAO:
May 2008:
Defense Logistics:
Navy Needs to Develop and Implement a Plan to Ensure That Voyage
Repairs Are Available to Ships Operating near Guam when Needed:
Defense Logistics:
GAO-08-427:
GAO Highlights:
Highlights of GAO-08-427, a report to the Committee on Armed Services,
House of Representatives.
Why GAO Did This Study:
Unscheduled ship maintenance, known as voyage repairs, is a high
priority for the U.S. Navy. Such repairs are sometimes beyond the
capability of the ship’s crew to perform; cannot be deferred; and must
be made at a remote location. After the 1995 Base Realignment and
Closure Commission recommended closing the former Naval Ship Repair
Facility, Guam, the Navy leased the property at that facility to the
Guam Economic Development and Commerce Authority, which sub-leased the
property to a private shipyard. DOD has since begun planning for a
military buildup on Guam. In January 2007 the Navy recommended allowing
the private shipyard’s lease on Navy land to expire in 2012.
Consequently, the House Armed Services Committee asked GAO to determine
the extent to which the Navy has (1) identified future ship repair
requirements at Guam, and (2) identified and assessed options to
address those requirements. GAO reviewed documents related to ship
maintenance and interviewed officials affiliated with private
contractors, the Guam government, the Marine Corps, Military Sealift
Command, and the Navy in conducting this review.
What GAO Found:
The Navy has not identified voyage surface ship repair requirements for
2012 and beyond for vessels operating near Guam, although some
information is available on which to base estimated requirements for
planning. Navy officials stated that they cannot estimate such
requirements because the Navy expects to change its force structure,
the Marine Corps has not finalized its plans for any additional vessels
associated with the buildup, and Military Sealift Command expects
changes to its force structure at Guam. Although the Navy, Marine
Corps, and Military Sealift Command have not made final force structure
decisions or operational plans for vessels operating at or near Guam,
information is available to support an estimation of ship repair
requirements as part of the multiyear planning and budgeting process.
Specifically, the Navy (1) knows the history of voyage repairs
conducted on Guam; (2) can identify vessels likely to operate near Guam
based on planned force structure realignments in the 2006 Quadrennial
Defense Review; and (3) can identify ship repair capabilities available
at other strategic locations in the Pacific area, including Yokosuka,
Japan. Developing requirements is a prerequisite for planning, and
without developing estimated repair requirements the Navy cannot
adequately evaluate options for meeting them.
Navy officials identified potential options for providing repairs in
Guam, but have not fully assessed their viability or identified time-
critical planning tasks. According to Navy officials, once the Navy
identifies voyage ship repair requirements for the Guam area, they will
choose from four options or a combination of options for providing
voyage repairs. First, the Navy could try to expand existing organic
repair capabilities to conduct voyage repairs. However, the existing
ship maintenance capabilities and facilities have little excess
capacity without augmentation, limiting their ability to perform
additional work. Second, the Navy could rely on repair teams flown in
from naval shipyards in the United States. Third, the Navy could build
a new Navy ship repair facility, though that could require years of
planning and new funding. Fourth, the Navy could contract out work to
either or both of the private ship repair providers now operating in
Guam, or to any other private ship repair facility that might choose to
locate in Guam. Three of these options might require building new
facilities or expanding existing facilities. Officials said they would
not begin planning until preparations begin for submissions to the
President’s budget for fiscal year 2012. However, lead time is required
to perform planning tasks necessary to provide repair capabilities from
the Navy’s suggested options. Without assessing the viability of each
option for voyage repairs in a timely manner, the Navy increases the
risk that voyage repair capabilities for ships operating in the Pacific
may not be available when needed, potentially undermining ships’
ability to accomplish their missions.
What GAO Recommends:
GAO recommends that DOD estimate future voyage repair requirements for
vessels at Guam; assess the options for providing repairs; and select
the best option or combination of options. DOD concurred with comments
to these recommendations.
To view the full product, including the scope and methodology, click on
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-08-427]. For more
information, contact Brian J Lepore at (202) 512-4523 or
leporeb@gao.gov
[End of section]
Contents:
Letter:
Results in Brief:
Background:
Navy Has Not Identified Future Voyage Ship Repair Requirements at Guam
although Some information is Available for Use in Planning:
The Navy Has Not Evaluated Options for Meeting Voyage Repair
Requirements in Guam beyond 2012, and Risks Not Having a Repair
Capability in Place when Needed:
Conclusions:
Recommendations for Executive Action:
Agency Comments and Our Evaluation:
Appendix I: Scope and Methodology:
Appendix II: Comments from the Department of Defense:
Appendix III: GAO Contacts and Staff Acknowledgments:
Table:
Table 1: Voyage Repair Man-Days and Costs for 2002-2007:
Figure:
Figure 1: Physical Locations of Private Ship Repair Facilities:
Abbreviations:
DOD: Department of Defense:
MSC: Military Sealift Command:
United States Government Accountability Office:
Washington, DC 20548:
May 12, 2008:
The Honorable Ike Skelton:
Chairman:
The Honorable Duncan L. Hunter:
Ranking Member:
Committee on Armed Services:
House of Representatives:
Guam is a territory of the United States with strategic value to the
Department of Defense (DOD). It is the westernmost U.S. territory with
Navy repair facilities, and DOD projects it will become increasingly
important in supporting emerging U.S. strategic and political interests
in the Pacific. U.S. Navy and Military Sealift Command (MSC) ships
operate at or near Guam.[Footnote 1] Between fiscal years 1987 and 1995
the Navy downsized its fleet from 594 to 392 ships and the Secretary of
Defense proposed to close the Naval Ship Repair Facility,
Guam,[Footnote 2] as part of the 1995 Base Closure and Realignment
process, based on the excess capacity in Navy depot maintenance
capabilities. The 1995 Base Closure and Realignment Commission
generally agreed with the Secretary and recommended that the facility
be closed. At that time, the Naval Ship Repair Facility, Guam,
performed intermediate-and depot-level repairs[Footnote 3] that
included (1) major maintenance and overhaul, and (2) emergent and
voyage repairs (hereinafter referred to as voyage repairs) on Navy and
MSC ships.[Footnote 4] The commission also found that the Navy repair
facility should be replaced by a private-sector repair capability if
MSC ships were to remain at Guam. Because MSC ships did remain, the
Navy leased the property on which the former Naval Ship Repair
Facility, Guam resided to the government of Guam, which in turn leased
it to a contractor doing business as Guam Shipyard. The Navy pointed to
the strategic value of having a private ship repair capability in Guam
as the rationale for noncompetitively awarding contracts to Guam
Shipyard from 1998 to 2007 to overhaul MSC ships and conduct other Navy
ship repair work, including voyage repairs. Guam Shipyard continues to
operate on the leased property. Guam Shipyard's lease was to expire by
October 1, 2007, although Guam Shipyard exercised an option to extend
its sub-lease with the Guam Economic Development and Commerce Authority
by 5 years, and they in turn exercised the option to extend the lease
by 5 years with the Navy. The lease terms gave the Navy the power to
terminate the lease at any time for cause, if cause existed.
DOD's planning effort for a military buildup on Guam, which could have
an impact on ship repair requirements in Guam, has begun.[Footnote 5]
DOD plans to (1) relocate about 8,000 Marines and 9,000 dependents from
Okinawa to Guam, (2) construct a new Navy pier to support visiting
aircraft carriers, (3) improve piers to support visiting amphibious
vessels, (4) increase the submarine presence on Guam and in the Pacific
region generally, and (5) locate an Army ballistic missile defense
capability on Guam. Historically, U.S. naval ships whose home port was
Guam were permitted by U.S. law to undergo overhaul, repair, or
maintenance in shipyards outside the United States or Guam. The John
Warner National Defense Authorization Act for Fiscal Year 2007 (the
Act) amended section 7310 of Title 10 of the U.S. Code to prohibit U.S.
naval vessels home-ported in Guam from undergoing such work in
shipyards outside the United States or Guam, other than in the case of
voyage repairs. The Act also required the Navy to evaluate options for
Guam Shipyard's lease and any anticipated future ship repair workloads
in Guam, and to report its findings to Congress. In January 2007, the
Navy issued its report and concluded that it would prefer that future
ship repair contracts on Guam be awarded competitively, and that it
would be premature to extend the lease with Guam Shipyard as a result
of the planned military build-up on Guam. Specifically, the Navy
recommended that the lease with the government of Guam and with Guam
Shipyard be allowed to expire on October 1, 2007, and that negotiations
be opened to terminate Guam Shipyard's option to extend the lease by 5
years or to allow the lease to run to the 2012 expiration on a smaller
acreage, if negotiations to terminate the extension option
failed.[Footnote 6] The Navy has not initiated negotiations since
issuing its recommendations, and has taken no action to terminate its
lease with the government of Guam for cause. Guam Shipyard exercised
its option to extend its lease with the government of Guam until 2012
without reducing its acreage, and the government of Guam completed its
lease extension with the Navy for that time period.
The Act also required GAO to evaluate the Navy report. On June 22,
2007, we briefed your staff on our evaluation and concluded that the
Navy's recommendation to allow Guam Shipyard's lease to expire was
logically supported, and we could not disagree with the Navy's
conclusion based on the information available at that time.[Footnote 7]
At that briefing, your staff asked that we also determine the extent to
which the Navy has (1) identified future ship repair requirements for
the Guam area, and (2) identified and assessed options to address those
requirements. This report responds to that request.
To determine the extent to which the Navy has identified future repair
requirements for ships operating in the Guam area and identified and
assessed options to address those requirements, we reviewed documents
related to past ship repair requirements in Guam, contracts associated
with ship repairs, and Navy records related to ship repair facilities
and activities. In addition, we interviewed officials at Guam Shipyard
and another private ship repair provider, Gulf Copper, Inc; Guam
government officials; Navy officials in Washington, D.C., Hawaii, and
Guam; and MSC officials in Washington, D.C., Norfolk, Virginia, San
Diego, California, and Guam. We conducted this performance audit from
July 2007 to March 2008 in accordance with generally accepted
government auditing standards. Those standards require that we plan and
perform the audit to obtain sufficient and appropriate evidence to
provide a reasonable basis for our findings and conclusions based on
our audit objectives. We believe that the evidence obtained provides a
reasonable basis for our findings and conclusions based on our audit
objectives. See appendix I for a more detailed scope and methodology.
Results in Brief:
The Navy has not identified voyage ship repair requirements for surface
vessels operating near Guam for 2012 and beyond, although some
information is available for developing estimated requirements for use
in planning. Navy officials stated that they do not have enough
information on which to base such an assessment. Nonetheless, while the
Navy has plans for an increased ship presence in the Pacific and can
generally predict the number and types of vessels likely to operate
near Guam for the next 2 years, the Navy has not determined precisely
how changes to its force structure for 2012 and beyond will impact ship
repair requirements in Guam. Furthermore, the Marine Corps has not
finalized its plans for additional vessels at Guam, or for the
potential frequency and duration of visits to Guam anticipated for
amphibious vessels which are currently home-ported in Japan, but that
may be moved to Guam by 2014 to support Marine Corps units being moved
there. In addition, MSC expects changes to its force structure
operating at or near Guam. Officials stated that the timeline is
uncertain for these changes, and thus the timing of future voyage
repair requirements remains uncertain. While the Navy, Marine Corps,
and Military Sealift Command have not made final force structure
decisions or operational plans for vessels operating at or near Guam,
information is available to support estimations of ship repair
requirements as part of the multiyear planning and budgeting process.
Moreover, DOD guidance requires that maintenance programs be clearly
linked to strategic and contingency planning. Previous ship repair
records and certain other information exists that could support
development of at least estimated requirements. Specifically, the Navy
(1) has historical data regarding voyage repairs conducted at Guam, (2)
can identify vessels likely to operate near Guam based on planned force
structure realignments in the 2006 Quadrennial Defense Review and
developing operational plans, and (3) can identify ship repair
capabilities available at other strategic locations in the Pacific
area. Estimation of requirements is a prerequisite for performing an
assessment of the viability of each option available for addressing
those requirements in a cost-effective and timely fashion. Without
developing estimated repair requirements, the Navy cannot determine the
best alternative among various potential sources of repair or support
planning to provide needed maintenance capabilities.
Navy officials have identified potential options to meet voyage repair
requirements on Guam for 2012 and beyond, but have not assessed their
viability or identified the critical planning tasks. By not performing
timely planning the Navy risks not having a repair capability in place
when needed and, as time passes, limits the options that are available
to it. Navy officials told us that once the Navy identifies voyage
repair requirements for surface ships operating at or near Guam, they
will select one or more of four options for providing those repairs.
The options are to (1) expand existing Navy repair capabilities on
Guam, (2) utilize repair teams flown in to Guam from U.S. Naval
shipyards, (3) establish a new Navy repair capability on Guam, or (4)
contract with one or more private ship repair providers. However,
existing Navy-owned repair sources will face limitations in their
ability to provide additional voyage repair capabilities for surface
ships because they do not have excess capacity to accept additional
workload, and the Navy has not determined the extent to which it will
rely on U.S. Naval shipyards for voyage repair capabilities on Guam.
Additionally, building a new Navy repair facility would require years
of planning and additional resources, and such planning has not begun.
Finally, the Navy has not determined the extent to which it would rely
on private-sector ship repair providers beyond 2012, the year that the
lease with Guam Shipyard will expire based on its exercise of the
extension option. Military construction may be required depending on
the option selected. Navy officials stated they will not begin planning
to address voyage repair requirements on Guam until preparations begin
for submissions to be included in the President's budget for fiscal
year 2012. Without performing an assessment of the viability of each of
the options for voyage repairs in a timely manner to support planning
and budgeting of critical tasks, the Navy risks not having adequate
voyage repair capabilities in place when needed to support operations
in the Pacific Ocean. Further, as time passes, the Navy limits the
options that are available to it because of the lead time that would be
required to support some of the options.
To ensure that adequate repair capabilities are available when needed,
we are recommending that the Secretary of Defense direct the Secretary
of the Navy to (1) estimate requirements for repairs for surface
vessels operating on or near Guam based on data determined to be most
appropriate by the Secretary of the Navy; (2) assess the benefits and
limitations that exist in each of the options selected for providing
repairs to ships operating near Guam in the future, and perform an
assessment of anticipated costs and risks associated with each option;
and (3) select the best option or combination of options for providing
repair capabilities to support surface ships operating near Guam, and
develop a plan and schedule for implementing a course of action to
ensure that the required ship repair capability will be available by
October 2012.
In commenting on a draft of this report, DOD concurred, with comment,
with each of our three recommendations. The department also provided
technical comments which were incorporated as appropriate. DOD's
comments and our evaluation are provided in the "Agency Comments and
Our Evaluation" section of this report.
Background:
Ships' crews are often able to complete voyage repairs while the ship
or battle group is underway. According to Navy officials, because ships
often include redundant systems, repairs can usually be undertaken
without interrupting the ship's mission or be postponed until the ship
reaches a repair facility or its home port. However, voyage repairs are
occasionally beyond the capability of ships' crews to complete, and
must be performed by an intermediate or depot-level ship repair
activity. Historically, Navy ships home-ported in Guam were permitted
by U.S. law to be overhauled, repaired, or maintained in shipyards
outside the United States or Guam. However, the John Warner National
Defense Authorization Act for Fiscal Year 2007 amended section 7310 of
Title 10 of the U.S. Code to prohibit U.S. naval ships home-ported in
Guam from being repaired in shipyards outside the United States or
Guam, other than in the case of voyage repairs.
Since the closure of the Navy Ship Repair Facility, Guam, the Navy and
MSC have relied on four different sources to provide voyage repairs in
Guam. First, the Navy submarine tender USS Frank Cable, which is a ship
home-ported in Guam, has provided voyage repair capabilities for
submarines when needed. Second, the Navy has relied on its Emergent
Repair Facility to repair submarines by using a repair crew left behind
from the USS Frank Cable when that ship is deployed. Third, fly-away
teams from U.S. Naval shipyards have been sent to Guam to conduct
voyage repairs when needed.[Footnote 8] Finally, the Navy has used its
contract with Guam Shipyard for voyage repairs of both submarines and
surface ships.
Guam Shipyard has repaired most MSC ships operating around Guam and has
assisted the Navy in completing voyage repairs on other ships and
submarines. For example, Guam Shipyard assisted U.S. Naval shipyards
with extensive voyage repairs on the USS San Francisco, a submarine
that struck an undersea mountain, by providing dry-dock services and
selected support services. Voyage repairs have averaged about 17
percent of the total annual workload performed at Guam Shipyard. While
Guam Shipyard officials told us that the voyage repair work would not
be sufficient to support its current infrastructure and personnel, in
2007 it won a competition for the overhaul of the USNS Bridge, an MSC
Pacific fleet support vessel. Competitions for overhaul of other MSC
ships operating near Guam are scheduled beyond 2008.
While Guam Shipyard has been the only commercial shipyard capable of
supporting Navy ship repair and overhaul requirements on Guam since
1998, a private ship repair provider new to Guam, Gulf Copper, has
initiated ship repair operations there. Although the Navy had indicated
in its 2007 report to Congress that additional voyage repairs could be
addressed by the submarine tender USS Frank Cable's repair department,
MSC has awarded contracts to both Guam Shipyard and Gulf Copper for
voyage repairs that may be needed during fiscal year 2008. MSC awarded
single-year contracts without renewal options, but MSC officials said
that they plan similar contracts for 2009 that will include option
years. Voyage repairs are unscheduled, and the capabilities required to
address them cannot be precisely predicted.
Navy Has Not Identified Future Voyage Ship Repair Requirements at Guam
although Some information is Available for Use in Planning:
The Navy has not identified voyage ship repair requirements for 2012
and beyond for surface vessels operating at or near Guam, although some
information is available on which to base estimated requirements to
support planning efforts. Navy officials stated that requirements have
not been developed for the following three reasons. First, the Navy has
not fully identified its future Pacific force structure or finalized
operational plans. Second, the Marine Corps' plans for additional
vessels, if any, and operations at Guam are still evolving. Third, MSC
projects making changes to its force structure for ships operating near
Guam. However, some information is available that could enable the Navy
to develop estimates of ship repair requirements. Estimation of
requirements is a prerequisite for assessing each option's ability to
address those requirements in a cost-effective and timely fashion.
Without developing estimated repair requirements, the Navy cannot
determine the best alternative among various potential sources of
repair or support planning to provide needed maintenance capabilities.
Officials State That Requirements Cannot be Estimated until Force
Structure Plans Are Final:
Navy officials stated that voyage ship repair requirements at Guam
cannot be identified until its future force structure plans are
finalized. The 2006 Quadrennial Defense Review indicated that the Navy
plans to operate six aircraft carrier strike groups and 60 percent of
its submarine force in the Pacific. Moreover, the service has plans for
a 313-ship Navy, but it has not yet identified the specific ships that
will comprise the force structure in the Pacific beyond 2012. Officials
stated that operational plans will dictate the number and type of
vessels that will visit Guam, but those plans are periodically adjusted
due to changes in the global security environment. As a result, Navy
officials stated that they cannot yet develop requirements for voyage
ship repairs at Guam for 2012 and beyond.
Similarly, the Marine Corps' plans for additional vessels in Guam have
not been finalized, but conceptual plans for relocating Marines from
Okinawa to Guam may include the home-porting of four new High-Speed
Vessels[Footnote 9] and two new Littoral Combat Ships[Footnote 10] at
Guam. In addition to the possibility of adding vessels, the Marine
Corps' force relocation from Okinawa to Guam is expected to result in
visits by amphibious vessels home-ported in Japan. These vessels are to
deploy to Guam to support training exercises for the Marines stationed
on Guam, and they may generate demands for voyage repairs during these
operations.
MSC also expects changes to its force structure operating near Guam,
but the timeline for these changes is uncertain. Current MSC vessels,
such as ammunition ships[Footnote 11] and combat stores ships,[Footnote
12] are expected to be replaced by new dry cargo/ammunition
ships[Footnote 13] on a one-for-one basis. MSC officials believe that
these new vessels will require less maintenance than the vessels they
replace, thus potentially reducing repair requirements. For example,
these vessels use new technology, including propulsion and electrical
systems that are thought to require less frequent maintenance and
different repair capabilities. Guam's first new dry cargo/ammunition
ship is to arrive on station sometime in 2008, but acquisition
schedules for additional such ships indicate deployment delays.
Delaying the arrival of the new ships will delay decommissioning of the
older ships, thus raising questions about the need to continue existing
levels of repair capabilities in the near term, as MSC believes the
older ships may require more intensive maintenance.
Some Information Is Available to Develop Estimated Requirements for
Repair Capabilities:
While the precise force structure requirements associated with the
military buildup around Guam remain uncertain, the Navy has some
information that can be used to identify estimated ship repair
requirements. Specifically, the Navy knows the history of voyage
repairs conducted on Guam; it can identify vessels likely to operate
near Guam, based on planned force structure realignments in the 2006
Quadrennial Defense Review; and it can identify ship repair
capabilities available at other strategic locations in the area,
including Pearl Harbor, and Yokosuka, Japan.
Historical data are available showing voyage repairs that have been
performed on surface vessels and submarines in Guam for at least the
past 6 years, and could be used to estimate likely future repair
requirements based on past experience. MSC recently used these data to
formulate contracts awarded for providing voyage repairs on vessels
operating at or near Guam for fiscal year 2008. Table 1 shows the
average number of man-days and the cost to complete voyage repairs from
private sources on Guam for fiscal years 2002-2007.
Table 1: Voyage Repair Man-Days and Costs for 2002-2007:
Fiscal year: 2002;
Man-days utilized: 5,919;
Dollar value: $4,198,962.
Fiscal year: 2003;
Man-days utilized: 6,564;
Dollar value: 4,120,036.
Fiscal year: 2004;
Man-days utilized: 4,315;
Dollar value: 3,252,163.
Fiscal year: 2005;
Man-days utilized: 12,137;
Dollar value: 8,507,291.
Fiscal year: 2006;
Man-days utilized: 9,274;
Dollar value: 5,506,583.
Fiscal year: 2007;
Man-days utilized: 3,582;
Dollar value: 5,390,946.
Fiscal year: Average;
Man-days utilized: 6,965;
Dollar value: $5,162,663.
Source: Military Sealift Command.
[End of table]
The Navy has identified some vessel assignments associated with the
force structure changes identified in the 2006 Quadrennial Defense
Review. Specifically, the Navy plans to replace the USS Kitty Hawk at
its home port in Japan with the USS George Washington--a new, nuclear-
powered aircraft carrier. Navy officials stated that operational plans
for that carrier's strike group will include visits to Guam for periods
of 2 to 3 weeks. Although the Navy has not identified the specific
vessels that will make up the strike group, Navy officials know the
types of vessels that are normally part of a strike group. Moreover,
Navy vessels have operated in the Pacific for decades, and voyage
repair experiences are readily available to the Navy through repair
records, shipyard billing, or similar documents. Nonetheless, the Navy
has not used these records to forecast estimated surface ship repair
requirements for Guam beyond 2012.
Further, extensive ship repair capabilities exist in other locations in
the Pacific, such as Pearl Harbor. Given that future ship repair
capabilities on Guam may need to support a larger number and different
mix of ships, the Navy could use ship repair data from Pearl Harbor and
other strategic forward-deployed locations--such as the Navy Ship
Repair Facility, Yokosuka, Japan, and the facility that repairs the
Navy amphibious ships that support the Marine Corps at Sasebo, Japan--
to help it develop estimated voyage repair forecasts for Guam.
DOD guidance requires that maintenance programs be clearly linked to
strategic and contingency planning, and that a determination be made as
to whether a specific industrial capability is required to meet DOD
needs. This guidance calls for the Navy to follow industrial-based
planning to ensure that required ship repair capabilities will be
available when needed. Specifically, DOD Directive 5000.60, "Defense
Industrial Capabilities Assessments," requires that planning occur when
a known or projected problem exists, or when there is a substantial
risk that an essential capability may be lost. Such problems can
consist of inadequate industrial capacity operated by a DOD entity or
similar inadequate capabilities in the private sector. Estimation of
requirements is a prerequisite for performing an assessment of the
viability of each option available for addressing those requirements in
a cost-effective and timely fashion. Although some information is
available for developing estimated requirements, the Navy has not
identified voyage surface ship repair requirements for 2012 and beyond
for vessels operating near Guam. Without developing estimated repair
requirements the Navy cannot determine the best alternative among
various potential sources of repair or support planning to provide
needed maintenance capabilities.
The Navy Has Not Evaluated Options for Meeting Voyage Repair
Requirements in Guam beyond 2012, and Risks Not Having a Repair
Capability in Place when Needed:
While the Navy has not planned for meeting voyage repair requirements
on Guam for 2012 and beyond, it has identified options for providing
repairs, although some require long lead times to implement. However,
by not performing timely planning the Navy risks not having a repair
capability in place when needed, and as time passes, limits the options
that may be available to it. Navy officials have stated that they do
not intend to develop plans for a voyage ship repair capability on Guam
until preparations for the 2012 budget cycle begin. However, in
response to our inquiries, the Navy identified four potential options
for meeting future voyage ship repair requirements on Guam and
acknowledged that it cannot avoid doing some voyage repairs there.
First, the Navy could use existing Navy-owned voyage repair
capabilities in Guam, though these face certain limitations in their
ability to take on additional voyage repairs. Second, fly-away teams
could be brought in from Navy-owned shipyards in the United States, and
these teams would rely on facilities and infrastructure in place on
Guam. Third, the Navy could develop a new repair facility, which would
entail significant planning, repair of existing infrastructure, and
possibly new military construction. Fourth, the Navy could contract out
the work to either or both of the existing private ship repair
providers or to any other contractor that might choose to locate at
Guam. DOD guidance requires that a determination be made as to whether
a specific industrial capability is required to meet DOD needs and that
a selection be made for meeting those needs. Moreover, Navy officials
acknowledge that if the option to expand existing Navy repair
capabilities on Guam or establish new Navy repair capabilities were
chosen, early identification of mission requirements would be needed to
facilitate planning and budgeting of new or expanded Navy construction
to ensure that a fully functioning Navy-owned ship repair facility
would be operational in 2012.
A Navy-Operated Ship Repair Capability Presents One Option, but
Existing Navy-Owned Capabilities on Guam Are Inadequate to Accept
Additional Voyage Repairs:
Existing Navy-owned capabilities in Guam are inadequate to address
current voyage repair requirements for surface vessels and are unable
to address additional voyage repair requirements without increased
capabilities and capacity. First, the primary mission for the USS Frank
Cable is to provide maintenance and support for the three fast attack
submarines home-ported on Guam, and to address the needs of visiting
submarines. At the time of our review, the submarine tender's repair
crew was operating at full capacity in meeting its primary mission. As
a result, the Navy contracted with Guam Shipyard to complete $1.2
million in voyage repairs on submarines between fiscal years 2002 and
2007, mostly to provide additional manpower to augment the submarine
tender's repair crew. Although the Navy has not developed voyage repair
plans for surface ships, it has developed some plans for the provision
of voyage and other repairs for submarines. For example, current plans
will require the USS Frank Cable to provide support for the new guided
missile submarine that will visit Guam for rotational crewing.
Additionally, the Navy plans to use part of the repair crew from the
USS Frank Cable to perform repair services for the submarine tender USS
Emory S. Land, which will be stationed at Diego Garcia in the British
Indian Ocean Territories.[Footnote 14] The repair crew on the USS Frank
Cable will be increased by about 170 personnel to enable about 160 to
rotate for workload assignments on the USS Emory S. Land, leaving no
more than 10 repair personnel to take on additional work. As a result,
according to Navy officials, it is unlikely that the USS Frank Cable
could provide voyage repairs for surface vessels in Guam in the future
without adding capability and capacity beyond the 170 additional
personnel already planned.
Second, the Emergent Repair Facility on Guam that supports submarines
when the USS Frank Cable is away from port[Footnote 15] lacks the
capability to meet surface voyage repair requirements. This facility is
used by a stay-behind repair crew from the USS Frank Cable when that
ship is away from its home port. According to Navy officials, the
Emergent Repair Facility is not adequate even for its current role.
Officials estimated that the Navy would need about $21 million to
expand and equip the facility just to meet its current submarine
mission requirements, without taking on additional voyage repairs for
surface ships. For example, the facility has no communications
capabilities; repair personnel must use personal cellular telephones
for any necessary communications. Navy officials acknowledge that it
would have to be expanded to meet any future surface voyage repair
requirements. Moreover, larger vessels may be unable to approach the
Emergent Repair Facility without conducting dredging operations and
completing pier improvements. As a result the Emergent Repair Facility
cannot be used to provide voyage repairs for surface vessels without
considerable planning and capital investment.
Effective Use of Fly-Away Teams from U.S. Naval Shipyards Is a Second
Option, but Depends upon Ability of Naval Shipyards to Deploy Personnel
to Guam and the Infrastructure and Facilities Available There:
The effective use of fly-away teams from Navy-owned shipyards in the
continental United States to perform voyage repairs at Guam depends on
the ability of U.S. Naval shipyards to provide personnel to perform
repairs without negatively impacting their own ongoing work, as well as
on the adequacy of infrastructure and facilities available for their
use in Guam. Further, U.S. Naval shipyards have not been provided with
voyage repair estimates to conduct workload planning and determine
their capacity to provide fly-away teams to Guam. The use of fly-away
teams may not be practicable or cost-effective for performing large
amounts of voyage repair work, because Navy-owned shipyards in the
United States that provide fly-away teams are currently operating
beyond their target capacities, although they anticipate having excess
capacity in the coming years. However, deploying fly-away teams to Guam
to meet large amounts of voyage repair requirements without advance
planning could undermine scheduled maintenance at the U.S. Naval
shipyards. Fly-away teams also need sufficient infrastructure and
equipment at the location at which they will conduct voyage repairs.
Because the USS Frank Cable and the Emergent Repair Facility both face
limitations, fly-away teams that deploy to Guam cannot be assured that
these facilities would be available to provide needed infrastructure or
equipment. Without more clearly defined repair requirements and further
examination of equipment and personnel necessary to meet those
requirements, the viability of using fly-away teams to provide future
voyage repairs is uncertain.
Establishment of a New Navy Depot Capability on Guam Is a Third Option,
but Would Require Infrastructure, Equipment, Personnel, and Funding:
Building a new Navy depot-level repair capability would require years
of planning and additional infrastructure, equipment, personnel, and
funding. If the lease on the property at the former Naval Ship Repair
Facility, Guam, is allowed to expire, establishing a new Navy-owned
ship repair capability at that location would require the Navy to
address infrastructure, equipment, and personnel requirements to create
the capability needed to meet surface voyage repair requirements on
Guam. The Navy would have to determine what capability is needed and
then take action to acquire the equipment to provide that capability.
Furthermore, infrastructure repairs may be needed to support work on
Navy vessels. For example, according to Navy officials the typhoon
moorings at Guam Shipyard may require repair. A new Navy depot-level
ship repair capability in Guam would also require staffing by military
and civilian personnel. Without a determination of equipment,
infrastructure, personnel, and funding requirements for providing new
surface ship repair capabilities, the Navy cannot know whether
establishing a new ship repair capability in Guam is a viable option.
Additionally, implementing this option would also require significant
lead time.
Private-Sector Ship Repair Providers Offer a Fourth Option, but the
Navy Has Not Determined the Extent to Which It Will Rely on Them beyond
2012:
The Navy has not determined the extent to which it will rely on private-
sector ship repair providers beyond 2012, when the lease on Navy
property occupied by Guam Shipyard expires. While it is unclear what
kind of private sector capability will be available beyond 2012, both
private ship repair providers operating in Guam have been awarded 1-
year contracts by MSC to provide selected voyage repairs to surface
vessels operating at or near Guam for fiscal year 2008. According to
MSC officials, new contracts are to be executed by the end of fiscal
year 2008, and this contracting arrangement will include option years
that address voyage repair requirements for MSC ships through 2012.
Guam Shipyard operates on Navy property located within Naval Base,
Guam. Gulf Copper operates from approximately 700 feet of pier space at
the commercial port opposite Navy property on Apra Harbor. It is
possible that additional private ship repair providers may express
interest in performing voyage repairs at Guam in the future, and that
Guam Shipyard may continue operations at another location in Guam
beyond 2012 when its lease on U.S. Navy property expires. Figure 1
depicts the physical locations of Guam Shipyard and Gulf Copper.
Figure 1: Physical Locations of Private Ship Repair Facilities:
This figure is a map of physical locations of private ship repair
facilities.
[See PDF for image]
Source: GAO, U.S. Navy.
[End of figure]
The Joint Depot Maintenance Program provides guidance on selecting
sources of maintenance and repair, and a DOD Handbook entitled
Assessing Defense Industrial Capabilities provides a framework for
coordinating analysis and determining the most cost-and time-effective
options for meeting DOD needs. If the option selected by the Navy for
providing ship repairs in Guam requires military construction, as may
be the case if the Navy chooses to expand existing Navy-owned
capabilities or to establish new Navy-owned capabilities, the military
construction requirements would have to be included in the budgeting
process for fiscal year 2010 in order for new facilities to be ready by
October 2012. However, Navy officials have stated that they do not
intend to develop plans for a voyage ship repair capability on Guam
until preparations for the 2012 budget cycle begin. Without performing
an assessment of the viability of each of the options for voyage
repairs in a timely manner to support planning and budgeting of
critical tasks, the Navy risks not having adequate voyage repair
capabilities in place when needed to support operations in the Pacific
Ocean, and as time passes, limits the options that could be available
to it by 2012.
Conclusions:
The Navy has not effectively identified voyage repair requirements that
are a prerequisite for selecting among the options to provide such
capabilities on Guam. While the Navy does not fully know its voyage
surface ship repair requirements near Guam for 2012 and beyond, it does
possess data that could be used to estimate requirements. Namely, it
could use existing ship repair experiences, projected requirements
identified in the 2006 Quadrennial Defense Review, and information
about repair capabilities maintained at other strategic locations to
identify its ship repair requirements for Guam in the near term and to
aid in developing a baseline forecast of repair capabilities it will
need for 2012 and beyond. Moreover, the requirements determination
process is a precursor to planning for the provision of ship repair
capabilities and selecting an option to provide those capabilities,
since a certain amount of lead time would be required to implement some
of the options. Additionally, a decision about future industrial repair
requirements should be an integral part of ongoing Guam infrastructure
planning to support the transfer of Marines to Guam from Japan.
However, the Navy has not developed such plans, nor has it assessed the
challenges associated with the options identified, or selected an
option to provide ship repair capabilities on Guam. Without identifying
requirements, performing a risk-based assessment of the viability and
costs of each of the options, selecting the best option or combination
of options available, and then developing and implementing an action
plan to address any challenges associated with the option or options
selected, the Navy lacks reasonable assurance that it will have
sufficient time to prepare the best option or combination of options
for meeting future surface ship repair requirements on Guam beyond
2012.
Recommendations for Executive Action:
To ensure that adequate voyage repair capabilities are available for
ships operating near Guam, and recognizing the lead time required to
implement options, we recommend that the Secretary of Defense direct
the Secretary of the Navy to:
* estimate requirements for repairs for surface vessels operating at or
near Guam based on data determined to be most appropriate by the
Secretary of the Navy;
* assess the benefits and limitations of each of the options for
providing repairs to ships operating near Guam, and perform an
assessment of anticipated costs and risks associated with each option;
and:
* select the best option or combination of options for providing repair
capabilities to support surface ships operating near Guam, and develop
a plan and schedule for implementing a course of action to ensure that
the required ship repair capability will be available by October 2012.
Agency Comments and Our Evaluation:
In a written response to a draft of this report, DOD concurred with all
of our recommendations with comments. The department's comments are
reprinted in their entirety in appendix II. The department also
provided several technical comments that have been incorporated as
appropriate.
With regard to our first recommendation for an assessment of
requirements for repairs for surface vessels operating at or near Guam,
the Navy responded that it has a methodology to determine annual
emergent repair requirements by ship class and fleet--which includes
voyage repair execution history as a subset--and that this requirement
will be included in the future years defense plan, and that no further
direction is necessary. While we acknowledge that the Navy looks at
overall maintenance requirements as a part of the annual budget
process, this process does not provide a detailed listing of specific
capabilities required for voyage repairs at strategic locations, such
as Guam beyond 2012. Given its unique location and the changing
circumstances that will impact voyage repair requirements in and around
that location, we continue to believe that a specific assessment of
requirements for providing surface vessel voyage repairs in Guam
represents a necessary baseline for planning for the provision of ship
repair capabilities beyond 2012 and for the selection of an option or
combination of options to provide those capabilities.
In concurring with our second recommendation regarding the need for an
assessment of the benefits and limitations of each of the options for
providing repairs to ships operating near Guam, the department's
response was that the Navy has already identified a plan for providing
repair capabilities for ships operating near Guam and that the Navy has
determined that establishing a new repair facility on Guam is not
viable since the expenditure of funds to do this is not necessary. The
department's response also noted that the Navy is already developing a
military construction project to expand the existing repair
capabilities on Guam in fiscal year 2010, that the Navy intends to
continue the practice of utilizing repair teams from U.S. Naval
shipyards and private shipyards as needed, and that the Navy intends to
continue the practice of contracting voyage repair work to one or more
private ship repair providers. The Navy may have determined that a new
repair capability on Guam is not necessary, but much of the existing
repair equipment currently used to support voyage repair on surface
vessels--including floating dry dock, floating crane, and industrial
equipment--are owned by Guam Shipyard and could potentially be removed
at the conclusion of the existing lease, if a new lease were not
negotiated. We continue to believe that it is essential that the
department determine whether it will have continued need for expensive
capital equipment such as the floating dry dock and crane, and whether
the capability provided by such equipment will be available from the
private sector. Finally, it is commendable that the Navy has a plan for
providing ship repair capabilities on Guam and is moving forward to
implement it. However, at the time of our exit briefing with the Navy
in January, the Navy did not inform us of this plan. Moreover, Navy
officials have told us that this plan was developed in February,
subsequent to our exit briefing and in response to our recommendations.
In concurring with our third recommendation regarding selection of the
best option or combination of options for providing repair capabilities
to support surface ships operating near Guam, the department stated
again that the Navy's plan for providing repair capabilities to support
surface ships operating near Guam has already been determined, and that
direction from the Secretary of Defense to the Secretary of the Navy is
not needed. The response also stated that committing the Navy to a
lease agreement in 2008 for a capability in 2012 is premature. While we
agree that committing the Navy to a lease in 2008 for a capability
required in 2012 is premature, it is not premature to decide whether or
not there will be an industrial activity--either owned and operated by
the government or leased by a private contractor--within the Navy
installation. The department stated in its response that the Navy
intends to use private-sector capability, but it did not state whether
that would be on the Navy installation on Guam. Given the detailed
planning that is required to support the planned buildup of military
personnel expected over the next few years in Guam, we believe it is
essential that the Navy determine whether or not it expects to continue
to have an industrial activity operating as a part of the Guam Master
Plan, and that it determine what acreage this activity would occupy.
We are sending copies of this report to the appropriate congressional
committees; the Secretary of Defense; the Secretary of the Navy; the
Commandant of the Marine Corps; and the Director of the Office of
Management and Budget.
If you or your staff has any questions about this report, please
contact me on (202) 512-4523 or at leporeb@gao.gov. Contact points for
our Offices of Congressional Relations and Public Affairs may be found
on the last page of this report. Additional contacts and staff
acknowledgments are provided in appendix III.
Signed by:
Brian J. Lepore, Director:
Defense Capabilities and Management:
[End of section]
Appendix I: Scope and Methodology:
To determine the extent to which the Navy has identified future ship
repair requirements for ships operating in the Guam area and assessed
options to address those requirements, we reviewed documents related to
ship maintenance. In addition, we interviewed officials responsible for
force structure planning, contracting for repairs on vessels belonging
to the U.S. Navy and Military Sealift Command, and performing repairs
on vessels belonging to the Navy and Military Sealift Command on Guam
as well as related organizations in Hawaii, and on the west coast of
the United States. Specifically, we interviewed officials and analyzed
documents related to ship repair requirements and the options proposed
to meet them at the offices of the Chief of Naval Operations; the
Commander, Pacific Fleet; the Commander, Marine Forces Pacific; the
Commander, Naval Sea Systems Command; the Commander, Naval Forces
Marianas; the Chief of Naval Installations; the Commander, Military
Sealift Command; the Commander, Naval Facilities Pacific; and the Guam
Economic Development and Commerce Authority. We also performed work at
the offices of several private ship repair providers to determine the
extent to which private-sector repair capabilities may be available on
Guam in the future. We also examined Department of Defense (DOD) policy
and Joint Guidance for providing maintenance and repair of DOD assets
afloat. We performed our review from July 2007 to January 2008 in
accordance with generally accepted government audit standards. Those
standards require that we plan and perform the audit to obtain
sufficient and appropriate evidence to provide a reasonable basis for
our findings and conclusions based on our audit objectives. We believe
that the evidence obtained provides a reasonable basis for our findings
and conclusions based on our audit objectives.
[End of section]
Appendix II: Comments from the Department of Defense:
Deputy Under Secretary Of Defense For Logistics And Materiel Readiness:
3500 Defense Pentagon:
Washington, DC 20301 -3500:
April 17 2018:
Mr. Brian Lepore:
Director, Defense Capabilities and Management:
U.S. Government Accountability Office:
441 G Street, N.W.:
Washington, DC 20548:
Dear Mr. Lepore:
This is the Department of Defense (DoD) response to the GAO draft
report, GAO-08-427, "Defense LOGISTICS: Navy Needs to Develop and
Implement a Plan to Ensure that Voyage Repairs are Available to Ships
Operating Near Guam When Needed," dated March 17, 2008 (GAO Code
351068).
The Department concurs with comment with each recommendation. An
explanation of the DoD position is enclosed. Technical corrections were
provided under separate cover. The Department appreciates the
opportunity to comment on the draft report.
Sincerely,
Signed by:
Jack Bell:
Enclosure:
As stated:
GAO Draft Report - Dated March 17, 2008 GAO CODE 351068/GAO-08-427:
"Defense Logistics: Navy Needs to Develop and Implement a Plan to
Ensure that Voyage Repairs are Available to Ships Operating Near Guam
When Needed"
Department Of Defense Comments To The Recommendations:
Recommendation 1: The GAO recommends that the Secretary of Defense
direct the Secretary of the Navy to estimate requirements for repairs
for surface vessels operating at or near Guam based on data determined
to be most appropriate by the Secretary of the Navy.
DOD Response: Concur with comment. The Navy has a methodology to
determine annual emergent repair requirements by ship class and fleet,
which includes voyage repair execution history as a subset, and has
included that requirement in each year's Presidential Budget. All ship
repair requirements, to include vessels operating near Guam, are
identified in the Navy's POM build and ultimately are included in the
FYDP. Further direction regarding emergent repair requirements is not
necessary.
Recommendation 2: The GAO recommends that the Secretary of Defense
direct the Secretary of the Navy to assess the benefits and limitations
of each of the options for providing repairs to ships operating near
Guam, and perform an assessment of anticipated costs and risks
associated with each option.
DOD Response: Concur with comment. The Navy's plan for providing repair
capabilities to support surface ships operating near Guam has already
been selected and is described below. The Navy has determined that
establishing a new repair facility on Guam, option 3 of the report, is
not viable since the expenditures of funds to do this are not necessary
for the following reasons: 1. Navy is already developing a MILCON
project to expand the existing Navy repair capabilities on Guam in
FY10. (Option 1 of the report) 2. Utilizing repair teams flown into
Guam from Naval Shipyards and private shipyards in the United States is
already a practice in Guam and elsewhere, and Navy plans to continue
this practice in the future in order to efficiently utilize existing
ship repair expertise as needed. (Option 2 of the report) 3. Navy
intends to continue the practice of contracting voyage repair work to
one or more private ship repair providers. (Option 4 of the report).
The Navy will use combinations of options 1, 2, and 4 to ensure
adequate resources are available to meet voyage repair requirements for
surface vessels operating at or near Guam. Additional direction is not
necessary.
Recommendation 3: The GAO recommends that the Secretary of Defense
direct the Secretary of the Navy to select the best option or
combination of options for providing repair capabilities to support
surface ships operating near Guam, and develop a plan and schedule for
implementing a course of action to ensure that the required ship repair
capability will be available by October 2012.
DOD Response: Concur with comment. As mentioned in response to
Recommendation 2 above, the Navy's plan for providing repair
capabilities to support surface ships operating near Guam has already
been determined. Accordingly, direction from the Secretary of Defense
to Secretary of the Navy to develop such a plan is not needed. Navy
recognizes this plan is contingent upon Navy, OSD and Congressional
approval of the MILCON project to expand the existing Navy repair
capabilities on Guam in FY10. Also, committing Navy to a lease
agreement in 2008 for a capability in 2012 is premature. In the
interim, Navy plans to utilize existing Navy facilities on Guam, fly
away teams from U.S. shipyards and the private sector ship repair
capability on Guam to execute voyage repairs on ships operating near
Guam. To date this combination has successfully provided needed voyage
repair capabilities.
[End of section]
Appendix III: GAO Contacts and Staff Acknowledgments:
GAO Contact:
Brian J. Lepore, (202) 512-4523 or leporeb@gao.gov:
Acknowledgments:
In addition to the contact named above, Julia Denman, Assistant
Director; Jeffrey Kans; Julia C. Matta; John E.Trubey; and Cheryl
Weissman made major contributions to this report.
[End of section]
Footnotes:
[1] MSC operates logistics support vessels and stations them at
strategic points such as Guam, and typically has several vessels at or
near Guam.
[2] Ship repair facilities differ from shipyards in that shipyards are
generally found near fleet homeport concentrations while ship repair
facilities are generally found near more remote deployment or operating
areas.
[3] Navy maintenance is performed at three different levels of
increasing complexity: shipboard, intermediate, and depot. Depot-level
maintenance is generally performed by civilian depot artisans or
contractors.
[4] Emergent and voyage repairs generally consist of maintenance to
repair any problems that emerge during deployment, or emergency work
needed to enable a ship to continue its mission and which can usually
be accomplished without a significant change to a ship's operating
schedule.
[5] In 2004 the United States and Japan began a series of sustained
security consultations aimed at, among other things, repositioning U.S.
forces from Japan to other areas, including Guam. GAO's September 2007
report on DOD's Overseas Master Plan (GAO-07-1015) stated that DOD's
planning effort for the buildup of military forces and infrastructure
on Guam was in its initial stages, with many key decisions and
challenges yet to be addressed.
[6] Guam Shipyards operates on 100 acres at the former Naval Ship
Repair Facility, Guam, but Guam Shipyard and Navy officials indicate
that it may be possible for them to continue operations from a smaller
acreage of about 23 acres.
[7] The Navy had concluded that, although there would be increased ship
presence in the Pacific, there would be no additional home-porting on
Guam and that additional voyage repairs resulting from the increased
presence were expected to be within the capability and capacity of the
home-ported submarine tender repair department.
[8] Fly-away teams consist of personnel with needed skill sets from
U.S. Naval shipyards to provide voyage repairs on an as-needed basis at
significant distances from U.S. Naval shipyards.
[9] High-Speed Vessels can operate in shallow waters and reach speeds
of 35-45 knots to allow for rapid deployment of Marine Corps company-
sized units with their vehicles, or be reconfigured to become a troop
transport for an infantry battalion.
[10] Littoral Combat Ships are being built to operate in shallow waters
close to shore. The ship uses interchangeable mission packages so that
it can be rapidly reconfigured for different missions.
[11] T-AE ammunition ships provide logistic support to U.S. Navy ships
at sea for all types of ammunition and assist with the transfer of
ammunition between weapons storage and maintenance facilities
worldwide.
[12] T-AFS Combat Stores Ships provide supplies to U.S. Navy ships at
sea using tensioned cargo rigs and CH-46 Sea Knight (or commercial
equivalent) helicopters.
[13] T-AKE Dry Cargo/Ammunition Ships are new vessels for transferring
cargo at sea to station ships and other naval warfare forces. The T-AKE
may also operate in concert with T-AO oilers as a substitute on-station
ship, providing direct logistic support to ships within a single
carrier strike group.
[14] Diego Garcia is an island military reservation located off the tip
of India with multiple resident commands including Afloat Pre-
Positioning Ships Squadron 4, Maritime Pre-Positioning Ships Squadron
2, and a Naval Mobile Construction Battalion Detachment.
[15] Navy officials estimate that the submarine tender is deployed
elsewhere for 8 to 20 weeks per year.
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